Cover story: The hottest Houston neighborhoods for 2018

byJason PorterfieldMay 7, 2018

There are many reasons to feel optimistic about Houston’s housing market even as the city continues to recover from Hurricane Harvey.

Single-family home sales dropped by 2.5 percent year-over-year in March, from 6,982 for the month in 2017 to 6,810, according to the Houston Association of Realtors. Inventory has increased, to go along with a bump in prices compared to March 2017.

The sales numbers may be down slightly, but there is still ample demand for homes in the city’s most exciting neighborhoods. Paige Martin of Keller Williams Memorial sees 2018 as having the potential to offer an even stronger market than 2017.

“2017 was Houston’s second-best real estate year ever,” Martin says. “2015 was the single best year. We believe that we are on pace where 2018 should surpass 2017 and 2015 in pricing, volume and activity. Much of this growth is being driven by improved job growth, especially in the energy sector. We’re also seeing Houston benefit from tax reform and individuals relocating to Houston from the east and west coasts.”

To Martin, the city’s hottest neighborhoods tend to be those that are centrally located, allow easy commutes to major job centers and offer high-quality elementary schools. People relocating to the city are primarily interested in neighborhoods close to the major job centers of Downtown, The Medical Center, Galleria and Energy Corridor.

“Specifically, we have seen record land values and multiple offers in West University, the Houston Heights, River Oaks and Oak Forest,” Martin says. “One our clients in the Heights had a situation with 54 showings, seven offers and the sale price being about $75,000 above list price.”

Misty Bacon of Bacon Realty Group specializes in the Clear Lake and League City area. She places the southeast suburb of El Lago near the top, alongside the Galveston neighborhood of Sea Isle. Just 30 or so miles outside Houston, El Lago provides its population of about 2,751 with numerous amenities.

“It offers a public library, gardening, an astronaut hall of fame, a history of boy scouting and events almost every month of the year,” Bacon says. “Sea Isle is approximately 18 miles southwest of downtown Galveston. It consists of more than 1,500 residential lots with beachfront, canal or dry land. Community amenities include public beach, a park, fishing pier and a swimming pool and tennis court. There’s something for everyone.”

Finding value in emerging neighborhoods

Amanda and Aaron Ruchti of The Ruchti Team, Coldwell Banker, look for clues like investors buying homes for rehab projects, young first-time buyers coming in and new retailers opening to spot emerging neighborhoods. They’ve been watching several areas around the Loop, including Lindale Park east of the Heights, Mangum Manor and Forest West, Shepherd Park Terrace and areas of Spring Branch, primarily North of Long Point.

“The reason we’re seeing some traction on that is that years ago, in places like Oak Forest and the Heights, you could get deals in the $200,000s or $300,000s,” Aaron Ruchti says. “They’re not there anymore, so people are looking for another option. This gives them a house that they can buy in the $300,000s. At the same time, complete remodels and new construction are still going on there in the $400,000s and $500,000s. There’s still value there.”

Martin is seeing great values in Lindale Park, EaDo, and the Hardy Yards.

“Lindale Park is a small neighborhood of about 1,200 homes that is three miles north of downtown and just east of I-45,” she says. “It has excellent access to downtown and much lower prices than the neighborhoods immediate west of I-45. Hardy Yards is a 43-acre section of land about 1,000 yards north of Downtown. It’s going through about $250,000,000 in planned and potential renovations to turn the area into a modern, mixed-use neighborhood. EaDo has been the recipient of over $100 million in expansions with the METRORail, BBVA Compass Stadium and new developments in the area. It is located about five minutes from downtown and prices are still quite reasonable.”

Markets for Millennials

Younger buyers are seeking out areas that are centrally located and close to nightlife and things to do. Downtown, EaDo, the Heights, Midtown and Rice Military are among the areas they seek out, according to Martin.

“Most of our millennial-aged clients have expressed interest in being close to restaurants and retail stores, having a short commute and being close to hike and bike trails,” Martin says.

Martin points to the recent expansion of the METRORail system as key to increased interest in a number of neighborhoods close to downtown, opening the door for future growth. EaDo, the Hardy Yards and Lindale Park are among those places that offer high value.

The Ruchtis have seen many of their Millennial clients gravitating toward areas along the bustling Washington Corridor and its many bars and restaurants. Midtown, Rice Academy and Cottage Grove in particular are draws.

“For most of the millennials, location is going to be the biggest driving factor,” Amanda Ruchti says. “Being inside the Loop or as close to it as possible is one of the most important things for them. They don’t care so much about the schools. Whatever the house is walkable to is important.”

Family Locations

Bacon points out that West University is highly desirable as a place to raise children. “Neighbors can stop to chat and kids play dates rule the calendar,” she says. “Residents can readily be seen out on the oak-shaded streets at twilight, pulling toddlers in wagons and kids on bikes blazing by.”

Bacon specializes in the Greater Clear Lake and League City area. Clear Creek ISD offers excellent schools with high graduation rates, and Clear Lake rates very high for empty nesters.

“There is easy access to Kemah where people like to sun, surf or eat the freshest seafood,” Bacon says.

The Ruchtis see families focusing largely on areas that are known for having good schools and a child-friendly vibe.

“One of the areas that’s one of the most popular for families is Memorial, as well as Garden Oaks and Spring Branch,” Amanda Ruchti says. “We have a lot of our clients that have purchased inside the Loop or close to it, then they move west once they have children. The Heights is really family-centric with a lot of stuff to do with children. The biggest focus would be the schools.”

Why is it you cannot think outside the inner loop circle? The majority of Houston citizens cannot afford those locations and seem to live good lives outside the loop! Those are where the families can afford a nice home and neighborhood!!!